Palm: Macquarie Downgrades; Cuts Target To $4, From $10

By Eric Savitz

Cusick says his checks find Palm is getting only about 1% share of handset sales at Verizon Wireless (VZ, VOD), or about 10,000 units a week, versus 400,000 units that were sold in to the company. At this rate, he says, there is “no prospect of Verizon follow-through” in the May quarter – and he sees weak sell-in at AT&T (T) in the quarter as well. (AT&T has said plans to launch a Palm phone, but no timetable has been announced, I would add.) He sees Sprint(S) launching other new smart phones soon, “which would reduce Palm’s share even further.”

Cusick adds that while the recently reduced Palm revenue guidance for the quarter of $300 million to $320 million seems low, he thinks it could actually be “dramatically lower,” and adds that “cash burn may accelerate.”

The analyst now sees unit sales of 885,000 in the May quarter, down from 1.14 million; for FY 2011 he goes to 3.8 million units, from 6.9 million, and he says even that “would be optimistic without a major improvement in momentum.”

For FY 2010, he now sees revenue of $1.2 billion, down from $1.7 billion, with a loss of 98 cents, down from a loss of 53 cents.

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There are 4 comments

MARCH 8, 2010 10:52 A.M.

Anonymous wrote:

I trust that the new Palm Pre 4G that is to be launched with Sprint is not too far into the future. Contrary to media reports I still think the Pre is a better phone than the iPhone. Its recent upgrade to WebOS 1.4 is quite impressive. I hope they survive, because if they do they will be a major player in smartphone world.

MARCH 8, 2010 11:01 A.M.

Max wrote:

Lets compare the 2 years chart for PALM, RIMM and AAPL.
Very interesting:
PALM is at 0% profit
RIMM is at 25% Lost
AAPL is at 70% profit
Is PALM beter today than 2 years ago? Sure is! Two years ago it was a dead company.
PALM today has a Strong Intellectual Property, new Platform, new OS.
Invest SMART.

MARCH 8, 2010 11:12 A.M.

Tim wrote:

@Max - I hope you are invested in index funds.......

MARCH 8, 2010 12:38 P.M.

Mindshare wrote:

Palm WebOs is really an outstanding OS. The VZW CSRs no nothing about the OS and will bash Palm and push you to a Droid the moment you mention Palm. I've gone into several VZW stores and have experienced this. It is really a shame. Palm needs new Hardware and needs to release it exclusively on VZW. Then VZW will have incentive to advertise and push Palm harder.

I have used Iphone OS & Android - WebOs is not as finished now, but, Palm is building the OS on solid rock. When it is finished (e.g. a 2.0 + OS) it will surpass Iphone, Android, Win 7, Blackberry in both functionality and user experience. WebOs is just to good to die.

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